Clued In: How to Keep Customers Coming Back Again and Again (paperback) - Softcover

Carbone, Lewis

Softcover

ISBN 10: 0137071124 ISBN 13: 9780137071128

Publisher: FT Press, 2004

Synopsis

Good, bad, or indifferent, every customer has an experience with your company and the products or services you provide. But few businesses really manage that customer experience, so they lose the chance to transform customers into lifetime customers.  In this book, Lou Carbone shows exactly how to engineer world-class customer experiences, one clue at a time.

Carbone draws on the latest neuroscientific research to show how customers transform physical and emotional sensations into powerful perceptions of your business... perceptions that crystallize into attitudes that dictate everything from satisfaction to loyalty. And he explains how to assess and audit existing customer experiences, design and implement new ones... and "steward" them over time, to ensure that they remain outstanding, no matter how your customers change.

About this title

About the Author:

LOU CARBONE has been exploring the dynamics of experience creation and management for 20 years. He founded and currently serves as CEO of Experience Engineering, an experience-consulting firm whose clients include IBM, General Motors, Avis, Allstate, Audi, Blockbuster, RBC Financial, Office Depot, H&R Block, Taco Bell, Allina Health Systems, and many other leading organizations. Carbone collaborated with Steve Haeckel on "Engineering Customer Experiences," the seminal article that introduced the concept of customer experience.

Excerpt. © Reprinted by permission. All rights reserved.:

Preface

Every sound business is built around a simple proposition: It makes or does something so well that customers will pay for the value being created. Peter Drucker, perhaps the most significant management scholar of our time, reduces this proposition to two basic axioms: A business has to make money, and a business has to make customers.

It's not an either/or--the two are opposite faces of the same coin. If a business doesn't make customers, it won't survive to make money. If it doesn't make money, it won't survive to make customers. One form of value must connect with the other.

Although many people in business will find this proposition familiar, fewer have extended its reasoning to the logical conclusion--that the customer is the ultimate arbiter of the value an organization creates and delivers, not CEOs, CFOs, shareholders, or stakeholders. Though each can make important contributions to the health and success of the business, none of them will be around for the long run unless the business creates value for its customers. In recent years, many businesses--many entire industries, in fact--seem to have lost their sense of balance in this regard. In trying to maximize the value of customers to their businesses, they appear to have lost sight of the need for their organizations to create value for their customers. The evidence is depressingly familiar:

Airlines have systematically reduced the experience of flying to the feeling of being herded onto and off of an airborne cattle car (a form of experience that was ongoing long before September 11).

Banks persistently charge account holders premium penalties for the most routine services. Periodically, some even try to nick customers for the experience of talking to a real live teller. Or the customer endures a circuitous maze created by the call center instant voice response banter to get to a destination.Credit card companies have tried to continually create new ways to bump interest rates into double digits and add painful penalty charges, to boot--this in an economy where the interest rate charged to banks has been at or near record levels.

Reorienting Priorities

From your own experiences, you can no doubt expand and extend this list with examples from across the full spectrum of business to find companies of every size and industry engaged in dysfunctional value creation. As wide-ranging as your examples may be, however, they'll probably have one thing in common: In virtually every case, someone will have made a decision that emphasizes how the customer can create value for the company (the financial value of the customer's business) more than how the company can create value for the customer. In few of these cases will the desires of customers have been factored in, let alone viewed as a priority. Far from trying to find a balance between customer expectations and business realities, it's a truism today that many decisions are based on only one perspective of value--the company's.

The question of how to balance the value of the experience to the customer and the value of the customer to the company leads to an opportunity to "value engineer" the relationship between organizations and their customers, thereby making any market segment profitable.

I believe today's organizations have become extraordinarily vulnerable. By neglecting to factor in customer expectations and preferences consistently --by essentially disenfranchising the customer from the focal point of value creation--these businesses have abdicated their obligation to customers and themselves.

The result? With modern management fixated almost solely on the bottom line, the value proposition of far too many businesses has become increasingly one-sided: lots of emphasis on the company but little on enhancing the customer value. The overriding concern for maximizing short-term financial results now permeates business thinking from "mahogany row" to the front line. Even customers are prepared to concede to a rationalization that says "I guess that's what they have to do to stay in business."

As a consequence, I believe today's organizations have become extraordinarily vulnerable. By neglecting to consistently factor in customer expectations and preferences, they have essentially disenfranchised the customer from the determinations of value. These businesses have fundamentally abdicated their obligation to customers and themselves. What's more, sensing how little value such businesses place on their interests, customers today have become unpredictable free agents: increasingly disappointed, disgruntled, devalued, and ultimately disloyal.

The things businesses do to make money need to be balanced against an enhanced assessment of what it will take to make and keep customers in tomorrow's even more competitive global economy.

The point? Without the long-term loyalty of their best customers to provide stability, the foundations of countless businesses are essentially anchored in sand. Yet it appears that many executives and managers charged with running those businesses are unwilling or unable to deal with their vulnerability. They literally don't have a clue.

This is not the preface to a soft-hearted call to disregard all the hard lessons learned in recent years on the make-money side of the house. Far from it: Indulging every customer request, no matter how fanciful or far-fetched, in the name of enhancing customer experiences is no more a formula for success than is relentless and unrestrained slashing of expenses. Competitive forces will continue to make it imperative to become ever better at taking care of the financial aspects of the business. If anything, the pressure on the make-money side is only going to continue to ratchet up.

But this is precisely why it's time to address the balance by rediscovering the make-customers side of the equation, which makes this a call to re-anchor the foundation of the business itself. It's time to get "clued in"--to develop a renewed and urgent sense of customer value creation--because the consequences of disregarding long-term customer preference and loyalty in the name of short-term cost reductions and cost-laden loyalty programs are both predictable and painful to contemplate.

The premise of the analysis in this book is deceptively simple: The things businesses do to make money need to be balanced against an enhanced assessment of what it will take to make and keep customers in tomorrow's even more competitive global economy. That means reconnecting-- and in some cases, connecting for the first time--with customers as intimate participants, sometimes even partners, in theprocess of value-creation. Now more than ever, the value created for customers needs to be a central consideration in the short-term growth and long-term health of any business.And experience is the key.

The Experience Differentiator

Within harsh financial realities, creating value for customers by providing distinctive experiential value is an exacting challenge. But it's far from insurmountable. Making money and making loyal customers are not mutually exclusive.

The essence of experience as a value proposition is as old as business itself. It isn't tied to or limited by geography, demographics, or economic forces. It applies whether an organization produces products, delivers services, or does a combination of both. It doesn't matter whether the customer is a consumer or another business.

The fact is, customers cannot not have an experience! They'll have one whether you want them to or not. The question is, How random or managed is the experience you are delivering?

Experience has always been both a bridge and a by-product when customers connect with organizations. But up to now, too many businesses have acted as though competitive advantage comes more from individual product and service attributes than from an ability to create a cohesive total experience within which products and/or services are key components. But as many businesses have known for a long time, the "whole" is worth far more in impacting customers than any of the individual parts.

To be sure, the customer's total experience--much of it unconscious and emotional, rather than coldly rational--has always been a component of the value proposition puzzle. But now, as product and service attributes become commoditized and evened out, experiential elements and their value are rapidly coming to the fore. The quality of the customer's total experience is being increasingly recognized as the new differentiator.

Although this might seem like a bit of a stretch to some, it has been the focal point of my own work for at least 20 years. And I've been writing about it for more than a decade. In 1994, I collaborated with Steve Haeckel, who was then chair of the board of trustees of the Marketing Science Institute, in a first article on the subject for Marketing Management, the quarterly business management publication of the American Marketing Association. In "Engineering Customer Experiences,"1 we laid out the basic principles on which I built my consulting business, and it eventually has led me to write this book.

"Customers always get more than they bargain for," Steve and I wrote, "because a product or service always comes with an experience. By 'experience,' we mean the 'take-away' impression formed by people's encounters with products, services, and businesses--a perception produced when humans consolidate sensory information." 1

In the article, we introduced the concept of experience "clues" as the manageable building blocks of an experience defined as sensory information, whether occurring by design or happenstance, that collectively influenced the experience value perceptions in the mind of the customer. We also identified the stakes involved: "Unmanaged, these clues may cancel each other out and leave no net impression on the customer, or worse, induce a strong net negative perception. But if systematically crafted into a positive net impression, the clues promote customer preference, whi...

About this edition

• Publisher: FT Press
• Publication date: 2004
• ISBN 10: 0137071124
• ISBN 13: 9780137071128
• Binding: Paperback
• Edition number: 1
• Number of pages: 304